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Mortgage Applications Drop, But New Home Sales Rise

WASHINGTON (7/25/13)--Although U.S. mortgage applications decreased last week, new home sales in June rose 8.3% nationally. Sales increased to a five-year high--bolstering an important sector that is propelling the economic recovery (The Wall Street Journal July 24).

Sales increased to a seasonally adjusted rate of 497,000--the highest level since May 2008--the Commerce Department said Wednesday. However, rising mortgage rates and home prices could slow sales in the coming months, the Journal said.

Mortgage applications decreased 1.2% from a week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 19.

The Market Composite Index, a measure of mortgage loan application volume, declined 1.2% seasonally adjusted from one week earlier. On an unadjusted basis, the index dropped 1% from the previous week. The Refinance Index fell 1%, driven by a 12% drop in the government refinance index while the conventional refinance index rose by 2%.

The refinance index is at its lowest level since July 2011. The adjustable-rate mortgage share of activity decreased to 7% of total applications. To see the MBA release, use the link.